Tigers get a land-tax windfall from pokies venue [updated]

[one-eyed]

Richmond Football Club in a stalemate with pokies club landlord

    Sue Hewitt
    From: Sunday Herald Sun
    September 18, 2011

THE Richmond Football Club has taken legal action against the landlord of its pokies club, claiming it has mistakenly paid more than $200,000 for the landlord's land tax and rates.

The club claims it was no longer liable to pay the taxes and rates when it renegotiated the lease on the Wantirna Club in 2004, but hadn't realised it.

But the landlord, Mario Abbotto - an apparent Tigers fan and a patron of the club's Jack Dyer Foundation, who donated more than $5000 to a 2002 fundraiser - insists the club is responsible for the taxes and rates.

The stalemate is now being heard by the Victorian Administrative and Civil Tribunal after the club lodged an application for the tribunal to rule that the disputed charges were not its responsibility.

The club's chief operating officer, Michael Stahl, in a letter to the tribunal last month, said the club became aware of the mistake only in December 2009 when told by its solicitors it was not responsible for land tax or rates.

By then the club had paid $124,623 in land tax, almost $82,000 in council rates and almost $4000 in water rates since the new lease was negotiated in 2004 and wanted a refund.

Mr Stahl said Mr Abbotto's company, Verraty Pty Ltd, had refused to carry out repairs and maintenance.

He claimed the main bar needed a complete overhaul - the timber was rotting and fungus was growing out of holes, while the external walls had severe cracks.

In its application lodged last October, the club said it originally entered a 10-year lease in 1998 with rent starting at $714,000 a year.

It said when the lease was varied in 2004 and extended to a 20-year lease it became a "retail premises lease" under which the club was no longer liable to pay land tax or rates.

The tribunal is yet to make a finding.

http://www.heraldsun.com.au/news/more-news/richmond-football-club-in-a-stalemate-with-pokies-club-landlord/story-fn7x8me2-1226139979628


Updated:   Nov 19, 2011

Tigers get a land-tax windfall from pokies venue

RICHMOND Football Club has had a win, but not on the field. A tribunal has ordered the landlord of its eastern suburbs pokies venue to repay the Tigers $125,000 in land taxes that the club had mistakenly paid over several years.

Richmond took Verraty Pty Ltd to VCAT after a dispute arising from the renegotiation of the Wantirna Club lease in 2004.

Verraty's owner is Mario Abbotto, who donated more than $5000 to the footy club's Jack Dyer Foundation in 2002.
 
VCAT was told that Richmond paid $714,000 rent in the first year of the original lease, with payments to increase 4 per cent a year over 10 years.

Last year the Victorian Commission for Gambling Regulation allowed the Wantirna Club to increase its number of poker machines by 10 to 87.
 
It was reported that pokies players lost $30 million at Tiger venues in Wantirna and Richmond from 2006-09.

http://www.heraldsun.com.au/news/more-news/tigers-get-a-land-tax-windfall/story-fn7x8me2-1226199366090

[Owl]

dodgerama

[10 FLAGS]

Ive never beeen a supporter of us being at the Wantirna Club. That we are there for another 12 years isnt a positive IMHO.

[Dice]

Ive never beeen a supporter of us being at the Wantirna Club. That we are there for another 12 years isnt a positive IMHO.

It's a poxy little pokies joint too. Probably has the fewest machines bringing in cash in the whole of Melbourne.

[10 FLAGS]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

[bojangles17]

gee your making good sense today 10fl...that sounds to me an extraordinary rent to pay...Id suggest there's alot more to this than meets the eye

[bojangles17]

sure is, glad this came out before the AGM, let me guess, CC signed onto it...someone should see how fair dinkum a tiger supporter this fella is, if so, he'd have us on a peppercorn rent like Matthieson and the Blues

[Penelope]

when your landlord is named Mario Abbotto,...Money talks and ............

is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.

[bojangles17]

when your landlord is named Mario Abbotto,...Money talks and ............

is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.

thought the same thing Al, sounds like extortion to me  ...no wonder they leaked it to the media

[tiger4life]

sure is, glad this came out before the AGM, let me guess, CC signed onto it...someone should see how fair dinkum a tiger supporter this fella is, if so, he'd have us on a peppercorn rent like Matthieson and the Blues

club said it originally entered a 10-year lease in 1998

[mightytiges]

The club claims it was no longer liable to pay the taxes and rates when it renegotiated the lease on the Wantirna Club in 2004, but hadn't realised it.

Wouldn't you get Club solicitors to go over any contract and check all the details and aspects of it before allowing the Club to agree to it?  ???

Sounds like amatuer hour .

[mightytiges]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

[10 FLAGS]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

[blaisee]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.

You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. 

[WilliamPowell]

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

No; not necessarily - it is a an extremely difficult one explain

However,  the club would be following accounting standards, which means they are required by law to value the impairment value of the contract on a yearly basis. Yes they wrote down an amount a couple of years back an amount but if circumstances (trading conditions) were to change that write off could be reversed back to the P&L. As I said extremely difficult to explain

is the lessee being expected to pay rates and land tax normal, in a commercial lease?
It's unheard of in a domestic one.

It is becoming more common in commercial leases al

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

Hindsight is a great thing isn't it?

I would argue that when they entered the original agreement, the business modelling would have shown that the club would have made the initial investment back easily as well the yearly rent as gaming revenues were going to be the great saviour of so many sporting clubs. Sadly, as the revenues grew so did the govt's take in the form of the pokie taxes.... which meant the club's revenue's decreased therefore overall profits

RFC are not the only clubs who have been bitten....

Can I add that $714K a year rental isn't that much.... trust me

As I said hindsight is a wonderful thing